Congrats!

You just bought the Wall Street equivalent of a brand-new sports car… before the first oil change.

Here’s the part they “forget” to mention while they’re ringing the opening bell: The real owners—the founders, VCs, and early employees—are sitting in the pit lane, strapped into Lambos made of your future sell-off, counting down to the lock-up expiration like it’s New Year’s Eve in Vegas.

And when that clock hits zero?

Balloons don’t drop. 

Shares do.

Because nothing says “thanks for the moonshot” like dumping millions of insider shares onto the market and watching retail bag-holders pretend it’s a “healthy pullback.”

In Time Freedom Trading, we don’t just watch the confetti fall—we front-run the hangover. 

We know when the insiders get itchy trigger fingers, we know where the liquidity will thin, and we know how to fade the lock-up like it’s a bad TikTok trend.

So buckle up. 

We’re about to walk you through the What, So What, and Now What of IPO lock-up fades—so next time, you’re not the exit strategy… you’re the sniper.

Once the lock-up ends, insiders may begin selling, increasing supply and exerting downward pressure on the stock price. Empirically, stocks often decline 1–3% right after lock-up expiration; over the following month, the average drop can be around 2.4%, though larger firms tend to see a milder 0.5% decline 

Trader behaviors—like building short interest in anticipation of selling pressure—often begin leading into the expiration.

• Anticipated Selling Pressure: Unlocking of shares can flood the market with supply, potentially triggering price dips.

• Volatility Opportunities: The period around lock‑up expiration typically brings increased volatility—ideal for nimble traders.

• Technical Dynamics: Thin float issues (e.g., when only a small portion of shares are tradable) can amplify price swings, both before and after the expiration.

Despite the fireworks on day one, the long game is a different story:

• From 1980–2023, U.S. IPOs delivered an average 3‑year market‑adjusted return of –20.2%—that’s a 20% underperformance compared to just staying in the broader market (like the S&P500)

• So while insiders are busy topping off their yacht fuel tanks, retail investors are left holding the under-performing pump.

If you thought that trend had reversed recently, think again:

• A 2025 analysis of IPOs since January 2024 shows two-thirds of them are already trading below their listing price—barely off the starting line and already in a hole.

• "the market is underestimating the "thematic power of more compute, sooner – more powerful, larger fabrics at gargantuan scale".
  
  
• Intrator stresses that scaling CoreWeave's capacity and services is critical to its success in a market he describes as "structurally undersupplied".
  
  

• Since its March 2025 IPO, the AI-cloud firm soared nearly 200%. Its lock‑up is set to expire immediately after a recent earnings report.
  
  

• Impact: Analysts warn of possible selling pressure, though historical data suggests very little immediate impact on the first day—meanwhile, a moderate decline (~2.4%) over the next month is more common.
  
  

• Its large float and market cap (~$57B) suggest a smaller average post‑lock‑up decline (~0.5%) relative to smaller IPOs 

1. Prospectus Details Are Key
   • Review IPO S‑1 filings for exact lock‑up dates and share volumes subject to lock-up.


2. Monitor Historical Behavior
   • Look at how similar companies reacted around lock‑up expirations—especially in your sector.
     
     
3. Watch Insider Incentives
   • Not all insiders immediately sell. Strong insider retention may signal confidence and mitigate downside.
     
     
4. Consider Supply vs. Float Size
   • If a large share percentage is locked, expiration is more impactful. A small locked float may mute effects.
     
     

• Don’t ignore lock‑up dates—even if the stock still looks “hot.”
  
  

• Avoid assuming lock‑up expiry always leads to dramatic declines—it’s often subtle or priced in.
  
  

• Don’t trade without gauging liquidity; thin float can lead to excessive slippage.

1. Short Window Before Expiry
   • As pressure mounts heading into expiration, some traders take short positions or buy put options anticipating a pullback.
2. Day of Expiration
   • Market pricing already adjusted? Expect volatility; traders may either short or look for reverse moves if a short squeeze occurs—e.g., Shake Shack once rallied 30% post-lock-up due to a squeeze.
3. 1–4 Weeks After Expiry
   • Historically, this is where the average 2.4% drop materializes; for larger firms, keep expectations moderated (~0.5%) .
4. Post Volatility Stabilization
   • If insiders hold, or company fundamentals remain strong, stock might regain strength—observe whether insiders hold or sell at expiry.

Tactical Trading Plan

Here are some of the standout IPOs this year—the kinds of names where savvy fade strategies could come into play:

• Bullish (BLSH) – Crypto exchange priced at $37, soared as much as 218% on debut (August 13, 2025)
• Miami International Holdings (MIAX) – IPO priced at $23 and listed at ~32% premium debut (August 14, 2025)
• Circle Internet Group (CRCL) – Stablecoin issuer; price exploded from $31 IPO to over $153, now valued around $35B
• CoreWeave (CRWV) – AI infrastructure firm: lock‑up expiration arriving now, with ~200% IPO rally preceding it.
• Other names: Figma, Firefly Aerospace, and Chime—all examples of strong IPO runs in 2025.

• Think like a Trader and Investor
• Build your own "consistency code"
• Grow into Profits with Providence. 

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